c-Abl is a nuclear and cytoplasmic tyrosine kinase involved in a variety of cellular growth and differentiation processes. In contrast to its oncogenic counterparts, like BCR-Abl, c-Abl is not constitutively tyrosine phosphorylated and its catalytic activity is very low. Here we report tyrosine phosphorylation of endogenous c-Abl and a concomitant increase in catalytic activity. Using Abl -/- cells reconstituted with mutated c-Abl forms, we show that phosphorylation and activity depend on Tyr412 in the activation loop. Tyr412 is also required for stimulation by PDGF or by cotransfection of active Src. Phosphorylation of Tyr412 can occur autocatalytically by a trans-mechanism and cause activation of otherwise inactive c-Abl, suggesting a positive feedback loop on c-Abl activity. In the recent structure of the Abl catalytic domain bound to the STI-571 inhibitor, unphosphorylated Tyr412 in the activation loop points inward and appears to interfere with catalysis. We mutated residues involved in stabilizing this inhibited form of the activation loop and in positioning Tyr412. These mutations resulted in tyrosine phosphorylation and activation of c-Abl, as if relieving c-Abl from inhibition. Tyr412 is therefore necessary both for activity and for regulation of c-Abl, by stabilizing the inactive or the active conformation of the enzyme in a phosphorylation-dependent manner.